Going through a very, very amicable & collaborative divorce in California. Married 20 years, my spouse and I have dramatically different income levels and are 49 and 50. He is eligible to retire in a year and I already have (not formally; I cannot until 60).
My attorney said he could do something with his CALPERS to pay off the mortgage and give me a paid off house. That would be great! We bought it at 385k with 5% down at 4.6% on a 30 year loan. 70k of the principal is paid off. So the equity is low if we sold and split it. But it's now worth 600k and mortgage rates and rents are way up here, and I don't qualify for a mortgage and he doesn't make enough to buy again. Also, he would rather rent.
He wants to give me the house, paid off, and said he really liked my lawyers' proposal. We don't plan to divide basically any community property because we both see our money as our own and he really wants to make sure I am cared for… he has a lot of guilt over this divorce and I am easygoing and he is grateful we were married. He is worried I won't be able to support myself, which is probably true. And we plan to remain good friends. Also that financial differential, he knows I gave up a lot already to be with him.
Now, he has CALPERS retirement worth like 2 million (I don't exactly understand this but he gets 80% at 60 and 40% in a few months? He has made 120k for about 20 years, since we married) but doesn't care about it since he is set to inherit excellent family money eventually. He is the sole beneficiary of two chunky trusts and several houses, so he isn't worried financially about his future. Just mine.
With all that said: what is my lawyer talking about? CALPERS doesn't show as being a tradable asset online? Is she just wrong? I can't figure it out and am definitely not great at following math or budgets. He isn't either by the way. We are both liking this idea but don't understand it well.
Does it make sense to anyone more in the know?
CalPERS to pay off mortgage in amicable divorce?
byu/the_latest_greatest inRealEstate
Posted by the_latest_greatest
2 Comments
If he is fine renting why not just set it up that he pays the mortgage payment? Have some insurance set up where the mortgage is paid if he were to pass.
CALPERS is an enormous defined benefit pension system. The great thing about these is that all of the options and details are defined in a written document.
You need to find that document and read it. It should explain the what happens to the benefits in the event of a divorce. You are likely entitled to a portion of the benefit, of which you could choose to cash it out.
Again, the first step is to read the documents that CALPERS almost certainly provides.